In the previous post I introduce you to reader Nuri, a young sister seeking some advice on how to get her financial house in order.
Here's what she asked me about banks:
Nuri: Which bank is the best to set up my primary savings acct with (best interest rate, least stipulations, etc)? Or do you think I should use other routes to save, rather than the normal savings acct?
DH: There are a lot of banks that might fit the bill. How you want to stash your emergency fund is up to you. I'd start with Bankrate.com. Click the checking and savings tab to get started. It will show you banks with the highest interest rates for savings account, but also how much money may be required to open the accounts, if any.
I suggest not making it easy for yourself to get that money. In other words, you want to access it when you want to without much hassle, but DO NOT get a debit card linked to the account. You may also want an account in a separate bank from your regular checking.
I use HSBC online accounts. They can be cumbersome, but I can easily transfer money from my regular checking and saving to those accounts.
Interest rates are far lower than they were just a a year or two ago. There may be way better ways to stash you emergency fund. That's something I'm researching for myself right now.
Nuri: What did you use to create your budget?
DH: Ha! I laugh because my budget went through at least 10 iterations before I created a method that I was comfortable with. I just used an Excel spreadsheet. At the top, I entered my monthly income. Then I subtracted my taxes. Then, I laid out all my spending categories (which came from keeping a spending record for a month). I subtracted them all from my income. If I spent more than I earned, then I went back and started making cuts.
Be realistic. You may think you can get by on $10 a month for movies and entertainment, until you actually try to do it and find that it's either impossible or wholly unpleasant.
Use your budget to see where the fat is. Maybe you cut down on the Starbucks. Maybe you don't go out for drinks 3x a week. Maybe you buy generic groceries. Maybe you cut down the cable or cut it off. Maybe you move to one phone line. Maybe you don't buy as much clothing a month (LOL, though I should talk!). Maybe you don't visit home every other weekend. Maybe you were spending a fortune on hair products and didn't know! Maybe you ease up on that.
That said, there are a lot of budgeting tools out there. I thought Mint.com did one. Microsoft has a budget tool. There are budget worksheets all over the Net. Even better, get a Dave Ramsey or David Bach book out of the library -- it'll have instructions on creating a budget.
Got any more help? Please leave comments below.